– Second quarter revenue of $128.3 down 2% – Gross Merchandise Volume
(GMV) of $227.2 down 12% – Adjusted Earnings Before Interest, Taxes,
Depreciation and Amortization (EBITDA) of $16.7 million down 43% –
Adjusted EPS of $0.26 down 46%
WASHINGTON–(BUSINESS WIRE)–May 8, 2014–
Liquidity
Services, Inc. (NASDAQ:LQDT) today reported its financial results
for its second quarter of fiscal year 2014 (Q2-14) ended March 31, 2014.
Liquidity Services, Inc. is a global solution provider in the reverse
supply chain with the leading marketplace for business surplus.
Liquidity Services, Inc. (Liquidity Services or the Company) reported
consolidated Q2-14 revenue of $128.3 million, a decrease of
approximately 1.5% from the prior year’s comparable period. Adjusted
EBITDA, which excludes stock based compensation and acquisition costs
including changes in acquisition earn out payment estimates, for Q2-14
was $16.7 million, a decrease of approximately 43% from the prior year’s
comparable period. Q2-14 GMV, the total sales volume of all merchandise
sold through the Company’s marketplaces, was $227.2 million, a decrease
of 12% from the prior year’s comparable period.
Net income in Q2-14 was $5.6 million or $0.17 diluted earnings per
share. Adjusted net income, which excludes stock based compensation,
acquisition costs including changes in acquisition earn out payment
estimates and amortization of contract-related intangible assets
associated with the Jacobs Trading acquisition – net of tax, in Q2-14
was $8.5 million or $0.26 adjusted diluted earnings per share based on
32.3 million fully diluted shares outstanding, a decrease of
approximately 56% and 46%, respectively, from the prior year’s
comparable period. During Q2-14, the Company repurchased 128,566 shares
of common stock expending $3.1 million as part of its previously
announced share repurchase program.
“While GMV was within our expected results, our Adjusted EBITDA and
Adjusted EPS were lower than expected due to mix changes in our DoD
surplus and retail businesses and delayed capital asset projects in both
the U.S. and Europe. We also experienced unusual softness in our energy
vertical due to an industry wide decline in line pipe and related
equipment,” said Bill Angrick, Chairman and CEO of Liquidity Services.
“In addition, we continued to invest aggressively to integrate our
marketplaces and global operations and develop new capabilities to
achieve our long term goal of a diversified, multi-billion dollar
commercial business that enables sellers and buyers of all sizes to
easily manage, evaluate and monetize assets in the $150 billion reverse
supply chain based on their industry, location and channel preferences.
At scale, Liquidity Services will provide shareholders with multiple
high margin revenue streams that leverage our investments in game
changing technology and global operations. To achieve our future vision,
we are undergoing a multi-year transformation of our business from
independent marketplaces to an integrated global business and
marketplace platform with a singular and superior user experience. As we
execute our transformation plan and manage the multi-year transition of
our DoD surplus contract, consolidated results will be less reflective
of our progress. Therefore, investors should evaluate our progress based
on our ability to grow the GMV and revenue of our commercial and
municipal government business going forward.
“As previously announced, we are pleased that we will continue to drive
innovation for the DoD for up to six years under the terms of a new
Surplus contract for all useable surplus items other than rolling stock.
The preliminary results of the live auction bidding events held by the
U.S. Defense Logistics Agency (DLA) on April 1-2, 2014 will result in
material changes to our DoD surplus business beginning in fiscal year
2015. We are the high bidder for the non-rolling stock contract and
expect our pricing to increase from 1.8% to 4.35% of Original
Acquisition Value. The high bidder for the rolling stock contract was
another company. The impact of the bidding results will decrease future
GMV and significantly increase our Cost of Goods Sold, which will
materially affect our EBITDA in fiscal year 2015. Under the terms of the
new Surplus contract, which have yet to be finalized, we expect to
handle an estimated $9 billion of original acquisition value of property
over the contract performance period. This continued relationship
delivers a steady source of anchor supply in key verticals we serve in
our commercial business.”
Business Outlook
It is difficult for us to forecast the sales and margins of our business
while we are awaiting the final specifications and timing of the work we
will be performing under the new DoD surplus contract. In addition, the
volume and mix of property flow under our current DoD surplus contract
has been more volatile recently, requiring us to obtain additional
warehouse space and incur increased staffing and operational costs.
Although global economic conditions have improved, our overall outlook
remains cautious regarding our commercial capital assets business due to
volatility in capital spending patterns. In addition, our retail supply
chain business has seen significant changes in consumer spending habits
in certain categories, such as electronics, which has been affected by
increases in payroll taxes, continued high unemployment, and reduced
innovation in the sector, resulting in decreased spending and decreased
pricing in the secondary market, resulting in margin pressure. Lastly,
we plan to increase investments in our technology infrastructure and
proprietary e-commerce marketplace platform to support further expansion
and integration of our existing and recently acquired businesses. In the
longer term, we expect our business to continue to benefit from the
following trends: (i) as consumers trade down and seek greater value, we
anticipate stronger buyer demand for the surplus merchandise sold in our
marketplaces; (ii) as corporations and public sector agencies focus on
reducing costs, improving transparency, compliance and working capital
flows by outsourcing reverse supply chain activities, we expect our
seller base to increase; and (iii) as corporations and public sector
agencies increasingly prefer service providers with a proven track
record, innovative scalable solutions and the ability to make a
strategic impact in the reverse supply chain, we expect our seller base
to increase.
The following forward looking statements reflect trends and assumptions
for the next quarter and FY 2014:
| (i) | stable commodity prices in our scrap business; | |
| (ii) |
stable average sales prices realized in our capital assets marketplaces; |
|
| (iii) |
improved margins in our GoIndustry marketplace as we continue to integrate the acquisition and complete our restructuring plans; |
|
| (iv) |
continued product flows under the DoD Surplus contract under the existing terms; |
|
| (v) | an effective income tax rate of 40%; and | |
| (vi) |
improved operations and service levels in our retail goods marketplaces. |
|
Our DoD Scrap Contract includes an incentive feature, which can increase
the amount of profit sharing distribution we receive from 23% up to 25%.
Payments under this incentive feature are based on the amount of scrap
we sell for the DoD to small businesses during the preceding 12 months
as of June 30th of each year. We are eligible to receive this
incentive in each year of the term of the Scrap Contract and have
assumed for purposes of providing guidance regarding our projected
financial results for the next quarter and fiscal year 2014 that we will
again receive this incentive payment.
GMV – We expect GMV for fiscal year 2014 to
range from $930 million to $975 million, which is a decrease from our
previous guidance range of $1.0 billion to $1.075 billion. We expect GMV
for Q3-14 to range from $225 million to $250 million.
Adjusted EBITDA – We expect Adjusted EBITDA
for fiscal year 2014 to range from $70 million to $80 million, which is
a decrease from our previous guidance range of $100 million to $108
million. We expect Adjusted EBITDA for Q3-14 to range from $18.0 million
to $21.0 million.
Adjusted Diluted EPS – We estimate Adjusted
Earnings Per Diluted Share for fiscal year 2014 to range from $1.10 to
$1.27, which is a decrease from our previous guidance range of $1.60 to
$1.76. In Q3-14, we estimate Adjusted Earnings Per Diluted Share to be
$0.28 to $0.34. This guidance assumes that we have an average fully
diluted number of shares outstanding for the year of 32.5 million, and
that we will not repurchase shares with the approximately $46.9 million
yet to be expended under the share repurchase program.
Our guidance adjusts EBITDA and Diluted EPS for (i) acquisition costs
including transaction costs and changes in earn out estimates; (ii)
amortization of contract related intangible assets of $33.3 million from
our acquisition of Jacobs Trading; and (iii) for stock based
compensation costs, which we estimate to be approximately $3.5 million
to $4.0 million per quarter for fiscal year 2014. These stock based
compensation costs are consistent with fiscal year 2013.
Key Q2-14 Operating Metrics
Registered Buyers — At the end of Q2-14,
registered buyers totaled approximately 2,524,000, representing a 9%
increase over the approximately 2,307,000 registered buyers at the end
of Q2-13.
Auction Participants — Auction
participants, defined as registered buyers who have bid in an auction
during the period (a registered buyer who bids in more than one auction
is counted as an auction participant in each auction in which he or she
bids), increased to approximately 665,000 in Q2-14, an approximately 3%
increase over the approximately 643,000 auction participants in Q2-13.
Completed Transactions — Completed
transactions decreased to approximately 132,000, an approximately 4%
decrease for Q2-14 from the approximately 138,000 completed transactions
in Q2-13.
GMV and Revenue Mix — The table below
summarizes GMV and revenue by pricing model.
|
GMV Mix |
||||||
| Q2-14 | Q2-13 | |||||
| Profit-Sharing Model: | ||||||
| Scrap Contract | 7.2 | % | 6.8 | % | ||
| Total Profit Sharing | 7.2 | % | 6.8 | % | ||
| Consignment Model: | ||||||
| GovDeals | 17.1 | % | 14.0 | % | ||
| Commercial | 35.6 | % | 45.1 | % | ||
| Total Consignment | 52.7 | % | 59.1 | % | ||
| Purchase Model: | ||||||
| Commercial | 23.1 | % | 19.6 | % | ||
| Surplus Contract | 17.0 | % | 14.5 | % | ||
| Total Purchase | 40.1 | % | 34.1 | % | ||
|
Total |
100.0 | % | 100.0 | % | ||
|
Revenue Mix |
||||||
| Q2-14 | Q2-13 | |||||
| Profit-Sharing Model: | ||||||
| Scrap Contract | 12.8 | % | 13.6 | % | ||
| Total Profit Sharing | 12.8 | % | 13.6 | % | ||
| Consignment Model: | ||||||
| GovDeals | 3.2 | % | 2.7 | % | ||
| Commercial | 11.0 | % | 12.2 | % | ||
| Total Consignment | 14.2 | % | 14.9 | % | ||
| Purchase Model: | ||||||
| Commercial | 37.3 | % | 39.0 | % | ||
| Surplus Contract | 30.1 | % | 28.9 | % | ||
| Total Purchase | 67.4 | % | 67.9 | % | ||
| Other | 5.6 | % | 3.6 | % | ||
| Total | 100.0 | % | 100.0 | % | ||
Liquidity Services, Inc.
Reconciliation
of GAAP to Non-GAAP Measures
EBITDA and Adjusted EBITDA. EBITDA
is a supplemental non-GAAP financial measure and is equal to net income
plus interest expense and other (income) expense, net; provision for
income taxes; amortization of contract intangibles; and depreciation and
amortization. Our definition of Adjusted EBITDA differs from EBITDA
because we further adjust EBITDA for stock based compensation expense,
and acquisition costs including changes in earn out estimates.
|
Three Months |
Six Months |
|||||||||||||
| 2014 | 2013 | 2014 | 2013 | |||||||||||
| (In thousands) | ||||||||||||||
| (unaudited) | ||||||||||||||
| Net income | $ | 5,631 | $ | 12,698 | $ | 12,724 | $ | 19,407 | ||||||
| Interest and other expense (income), net | 79 | 96 | 100 | (828 | ) | |||||||||
| Provision for income taxes | 3,753 | 8,824 | 8,482 | 13,296 | ||||||||||
| Amortization of contract intangibles | 2,272 | 2,407 | 4,679 | 4,617 | ||||||||||
| Depreciation and amortization | 1,973 | 1,980 | 3,977 | 3,967 | ||||||||||
| EBITDA | 13,708 | 26,005 | 29,962 | 40,459 | ||||||||||
| Stock compensation expense | 2,908 | 2,935 | 6,567 | 7,302 | ||||||||||
| Acquisition costs | 85 | 212 | 180 | 5,588 | ||||||||||
| Adjusted EBITDA | $ | 16,701 | $ | 29,152 | $ | 36,709 | $ | 53,349 | ||||||
Adjusted Net Income and Adjusted Basic and Diluted
Earnings Per Share. Adjusted net income is a supplemental
non-GAAP financial measure and is equal to net income plus tax effected
stock compensation expense, amortization of contract-related intangible
assets associated with the Jacobs Trading acquisition and acquisition
costs including changes in earn out estimates. Adjusted basic and
diluted earnings per share are determined using Adjusted Net Income.
| Three Months Ended March 31, | Six Months Ended March 31, | ||||||||||||
| 2014 | 2013 | 2014 | 2013 | ||||||||||
| (Unaudited) (Dollars in thousands, except per share data) | |||||||||||||
| Net income | $ | 5,631 | $ | 12,698 | $ | 12,724 | $ | 19,407 | |||||
| Stock compensation expense (net of tax) | 1,745 | 1,732 | 3,940 | 4,352 | |||||||||
| Amortization of contract intangibles (net of tax) | 1,090 | 1,072 | 2,180 | 2,162 | |||||||||
| Acquisition costs (net of tax) | 51 | 124 | 108 | 3,350 | |||||||||
| Adjusted net income | $ | 8,517 | $ | 15,626 | $ | 18,952 | $ | 29,271 | |||||
| Adjusted basic earnings per common share | $ | 0.26 | $ | 0.50 | $ | 0.59 | $ | 0.93 | |||||
| Adjusted diluted earnings per common share | $ | 0.26 | $ | 0.48 | $ | 0.58 | $ | 0.89 | |||||
| Basic weighted average shares outstanding | 32,231,011 | 31,561,412 | 31,187,038 | 31,522,133 | |||||||||
| Diluted weighted average shares outstanding | 32,321,482 | 32,331,686 | 32,489,776 | 32,692,975 | |||||||||
Conference Call
The Company will host a conference call to discuss the second quarter
2014 results at 10:30 a.m. Eastern Time today. Investors and other
interested parties may access the teleconference by dialing 877-703-6103
or 857-244-7302 and providing the participant pass code 32867942. A live
web cast of the conference call will be provided on the Company’s
investor relations website at www.liquidityservices.com/investors.
An archive of the web cast will be available on the Company’s website
until June 8, 2014 at 11:59 p.m. ET. An audio replay of the
teleconference will also be available until June 8, 2014 at 11:59 p.m.
ET. To listen to the replay, dial 888-286-8010 or 617-801-6888 and
provide pass code 97430347. Both replays will be available starting at
2:30 p.m. ET on the day of the call.
Non-GAAP Measures
To supplement our consolidated financial statements presented in
accordance with GAAP, we use certain non-GAAP measures of certain
components of financial performance. These non-GAAP measures include
earnings before interest, taxes, depreciation and amortization (EBITDA),
Adjusted EBITDA, Adjusted Net Income and Adjusted Earnings Per Share.
These non-GAAP measures are provided to enhance investors’ overall
understanding of our current financial performance and prospects for the
future. We use EBITDA and Adjusted EBITDA: (a) as measurements of
operating performance because they assist us in comparing our operating
performance on a consistent basis as they do not reflect the impact of
items not directly resulting from our core operations; (b) for planning
purposes, including the preparation of our internal annual operating
budget; (c) to allocate resources to enhance the financial performance
of our business; (d) to evaluate the effectiveness of our operational
strategies; and (e) to evaluate our capacity to fund capital
expenditures and expand our business.
We believe these non-GAAP measures provide useful information to both
management and investors by excluding certain expenses that may not be
indicative of our core operating measures. In addition, because we have
historically reported certain non-GAAP measures to investors, we believe
the inclusion of non-GAAP measures provides consistency in our financial
reporting. These measures should be considered in addition to financial
information prepared in accordance with generally accepted accounting
principles, but should not be considered a substitute for, or superior
to, GAAP results. A reconciliation of all historical non-GAAP measures
included in this press release, to the most directly comparable GAAP
measures, may be found in the financial tables included in this press
release.
Supplemental Operating Data
To supplement our consolidated financial statements presented in
accordance with GAAP, we use certain supplemental operating data as a
measure of certain components of operating performance. We review GMV
because it provides a measure of the volume of goods being sold in our
marketplaces and thus the activity of those marketplaces. GMV and our
other supplemental operating data, including registered buyers, auction
participants and completed transactions, also provide a means to
evaluate the effectiveness of investments that we have made and continue
to make in the areas of customer support, value-added services, product
development, sales and marketing and operations. Therefore, we believe
this supplemental operating data provides useful information to both
management and investors. In addition, because we have historically
reported certain supplemental operating data to investors, we believe
the inclusion of this supplemental operating data provides consistency
in our financial reporting. This data should be considered in addition
to financial information prepared in accordance with generally accepted
accounting principles, but should not be considered a substitute for, or
superior to, GAAP results.
Forward-Looking Statements
This document contains forward-looking statements made pursuant to the
Private Securities Litigation Reform Act of 1995. These statements are
only predictions. The outcome of the events described in these
forward-looking statements is subject to known and unknown risks,
uncertainties and other factors that may cause our actual results,
levels of activity, performance or achievements to differ materially
from any future results, levels of activity, performance or achievements
expressed or implied by these forward-looking statements. These
statements include, but are not limited to, statements regarding the
Company’s business outlook and expected future effective tax rates. You
can identify forward-looking statements by terminology such as “may,”
“will,” “should,” “could,” “would,” “expects,” “intends,” “plans,”
“anticipates,” “believes,” “estimates,” “predicts,” “potential,”
“continues” or the negative of these terms or other comparable
terminology. Although we believe that the expectations reflected in the
forward-looking statements are reasonable, we cannot guarantee future
results, levels of activity, performance or achievements.
There are a number of risks and uncertainties that could cause our
actual results to differ materially from the forward-looking statements
contained in this document. Important factors that could cause our
actual results to differ materially from those expressed as
forward-looking statements are set forth in our filings with the SEC
from time to time, and include, among others, our dependence on our
contracts with the DoD and Wal-Mart for a significant portion of our
revenue and profitability; our ability to successfully expand the supply
of merchandise available for sale on our online marketplaces; our
ability to attract and retain active professional buyers to purchase
this merchandise; the timing and success of upgrades to our technology
infrastructure; our ability to successfully complete the integration of
any acquired companies, including NESA and Go-Industry, into our
existing operations and our ability to realize any anticipated benefits
of these or other acquisitions; and our ability to recognize any
expected tax benefits as a result of closing our U.K. retail consumer
goods operations. There may be other factors of which we are currently
unaware or deem immaterial that may cause our actual results to differ
materially from the forward-looking statements.
All forward-looking statements attributable to us or persons acting on
our behalf apply only as of the date of this document and are expressly
qualified in their entirety by the cautionary statements included in
this document. Except as may be required by law, we undertake no
obligation to publicly update or revise any forward-looking statement to
reflect events or circumstances occurring after the date of this
document or to reflect the occurrence of unanticipated events.
About Liquidity Services, Inc.
Liquidity Services, Inc. (NASDAQ: LQDT) provides leading corporations,
public sector agencies and buying customers the world’s most
transparent, innovative and effective online marketplaces and integrated
services for surplus assets. On behalf of its clients, Liquidity
Services has completed the sale of over $4.5 billion of surplus,
returned and end-of-life assets, in over 500 product categories,
including consumer goods, capital assets and industrial equipment. The
Company is based in Washington, D.C. and has over 1,400 employees.
Additional information can be found at: http://www.liquidityservices.com.
|
Liquidity Services, Inc. and Subsidiaries |
||||||||
|
Consolidated Balance Sheets |
||||||||
|
(Dollars in Thousands) |
||||||||
|
March 31, |
September 30, |
|||||||
| 2014 | 2013 | |||||||
| Assets | (Unaudited) | |||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 101,766 | $ | 95,109 | ||||
|
Accounts receivable, net of allowance for doubtful accounts of |
27,055 | 24,050 | ||||||
| Inventory | 71,640 | 29,261 | ||||||
| Prepaid and deferred taxes | 18,993 | 11,243 | ||||||
| Prepaid expenses and other current assets | 6,136 | 4,802 | ||||||
| Total current assets | 225,590 | 164,465 | ||||||
| Property and equipment, net | 12,448 | 10,380 | ||||||
| Intangible assets, net | 22,223 | 28,205 | ||||||
| Goodwill | 210,824 | 211,711 | ||||||
| Other assets | 7,240 | 6,583 | ||||||
| Total assets | $ | 478,325 | $ | 421,344 | ||||
| Liabilities and stockholders’ equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 21,897 | $ | 16,539 | ||||
| Accrued expenses and other current liabilities | 64,369 | 34,825 | ||||||
| Profit-sharing distributions payable | 4,652 | 4,315 | ||||||
| Customer payables | 32,116 | 29,497 | ||||||
| Total current liabilities | 123,034 | 85,176 | ||||||
| Acquisition earn out payables | 18,565 | 18,390 | ||||||
| Deferred taxes and other long-term liabilities | 2,248 | 2,899 | ||||||
| Total liabilities | 143,847 | 106,465 | ||||||
| Stockholders’ equity: | ||||||||
|
Common stock, $0.001 par value; 120,000,000 shares authorized; |
31 | 31 | ||||||
| Treasury stock | (3,057 | ) | — | |||||
| Additional paid-in capital | 218,955 | 206,861 | ||||||
| Accumulated other comprehensive income | (1,644 | ) | 518 | |||||
| Retained earnings | 120,193 | 107,469 | ||||||
| Total stockholders’ equity | 334,478 | 314,879 | ||||||
| Total liabilities and stockholders’ equity | $ | 478,325 | $ | 421,344 | ||||
|
Liquidity Services, Inc. and Subsidiaries |
|||||||||||||||||
|
Unaudited Consolidated Statements of Operations |
|||||||||||||||||
|
(Dollars in Thousands, Except Per Share Data) |
|||||||||||||||||
| Three Months Ended March 31, | Six Months Ended March 31, | ||||||||||||||||
| 2014 | 2013 | 2014 | 2013 | ||||||||||||||
| Revenue | $ | 102,920 | $ | 106,199 | $ | 196,390 | $ | 207,528 | |||||||||
| Fee revenue | 25,409 | 24,125 | 53,887 | 45,001 | |||||||||||||
| Total revenue | 128,329 | 130,324 | 250,277 | 252,529 | |||||||||||||
| Costs and expenses: | |||||||||||||||||
| Cost of goods sold (excluding amortization) | 54,273 | 49,946 | 101,983 | 97,068 | |||||||||||||
| Profit-sharing distributions | 8,299 | 9,942 | 18,429 | 18,352 | |||||||||||||
| Technology and operations | 29,070 | 22,407 | 54,691 | 44,954 | |||||||||||||
| Sales and marketing | 10,459 | 9,973 | 20,290 | 20,301 | |||||||||||||
| General and administrative | 12,435 | 11,839 | 24,742 | 25,807 | |||||||||||||
| Amortization of contract intangibles | 2,272 | 2,407 | 4,679 | 4,617 | |||||||||||||
| Depreciation and amortization | 1,973 | 1,980 | 3,977 | 3,967 | |||||||||||||
| Acquisition costs | 85 | 212 | 180 | 5,588 | |||||||||||||
| Total costs and expenses | 118,866 | 108,706 | 228,971 | 220,654 | |||||||||||||
| Income from operations | 9,463 | 21,618 | 21,306 | 31,875 | |||||||||||||
| Interest and other (expense) income, net | (79 | ) | (96 | ) | (100 | ) | 828 | ||||||||||
| Income before provision for income taxes | 9,384 | 21,522 | 21,206 | 32,703 | |||||||||||||
| Provision for income taxes | (3,753 | ) | (8,824 | ) | (8,482 | ) | (13,296 | ) | |||||||||
| Net income | $ | 5,631 | $ | 12,698 | $ | 12,724 | $ | 19,407 | |||||||||
| Basic earnings per common share | $ | 0.17 | $ | 0.40 | $ | 0.39 | $ | 0.62 | |||||||||
| Diluted earnings per common share | $ | 0.17 | $ | 0.39 | $ | 0.39 | $ | 0.59 | |||||||||
| Basic weighted average shares outstanding | 32,231,011 | 31,561,412 | 32,187,038 | 31,522,133 | |||||||||||||
| Diluted weighted average shares outstanding | 32,321,482 | 32,331,686 | 32,489,776 | 32,692,975 | |||||||||||||
|
Liquidity Services, Inc. and Subsidiaries |
|||||||||||||||||
|
Consolidated Statements of Cash Flows |
|||||||||||||||||
|
(In Thousands) |
|||||||||||||||||
| Three Months Ended March 31, | Six Months Ended March 31, | ||||||||||||||||
| 2014 | 2013 | 2014 | 2013 | ||||||||||||||
| Operating activities | |||||||||||||||||
| Net income | $ | 5,631 | $ | 12,698 | $ | 12,724 | $ | 19,407 | |||||||||
|
Adjustments to reconcile net income to net cash provided by |
|||||||||||||||||
| Depreciation and amortization | 4,244 | 4,387 | 8,655 | 8,584 | |||||||||||||
| Gain on early extinguishment of debt | — | — | — | (1,000 | ) | ||||||||||||
| Stock compensation expense | 2,908 | 2,935 | 6,567 | 7,302 | |||||||||||||
| Benefit for inventory allowance | — | — | 291 | (733 | ) | ||||||||||||
| Provision (benefit) for doubtful accounts | 148 | 14 | 91 | (107 | ) | ||||||||||||
| Incremental tax benefit from exercise of common stock options | (414 | ) | (371 | ) | (3,296 | ) | (5,376 | ) | |||||||||
| Changes in operating assets and liabilities: | |||||||||||||||||
| Accounts receivable | 1,364 | 1,286 | (3,096 | ) | (1,891 | ) | |||||||||||
| Inventory | (35,869 | ) | (3,267 | ) | (42,670 | ) | (3,779 | ) | |||||||||
| Prepaid and deferred taxes | (8,136 | ) | (1,957 | ) | (7,750 | ) | (5,295 | ) | |||||||||
| Prepaid expenses and other assets | (1,484 | ) | (1,551 | ) | 1,305 | 3,328 | |||||||||||
| Accounts payable | 1,308 | (579 | ) | 5,358 | 766 | ||||||||||||
| Accrued expenses and other | 32,224 | (1,043 | ) | 29,543 | (6,019 | ) | |||||||||||
| Profit-sharing distributions payable | 178 | 806 | 337 | 273 | |||||||||||||
| Customer payables | 2,380 | (256 | ) | 2,619 | 586 | ||||||||||||
| Acquisition earn out payables | 86 | (2,050 | ) | 175 | (6,168 | ) | |||||||||||
| Other liabilities | (453 | ) | (429 | ) | (1,796 | ) | 538 | ||||||||||
| Net cash provided by operating activities | 4,115 | 10,623 | 9,057 | 10,416 | |||||||||||||
| Investing activities | |||||||||||||||||
| Increase in goodwill and intangibles and cash paid for acquisitions | — | (14 | ) | — | (14,698 | ) | |||||||||||
| Purchases of property and equipment | (2,272 | ) | (624 | ) | (4,950 | ) | (2,521 | ) | |||||||||
| Net cash used in provided by investing activities | (2,272 | ) | (638 | ) | (4,950 | ) | (17,219 | ) | |||||||||
| Financing activities | |||||||||||||||||
| Repayment of notes payable | — | — | — | (39,000 | ) | ||||||||||||
| Payment of acquisition contingent liabilities | — | — | — | (8,185 | ) | ||||||||||||
| Proceeds from exercise of common stock options (net of tax) | 1,762 | 295 | 2,231 | 504 | |||||||||||||
| Repurchases of common stock | (3,057 | ) | — | (3,057 | ) | — | |||||||||||
| Incremental tax benefit from exercise of common stock options | 414 | 371 | 3,296 | 5,376 | |||||||||||||
| Net cash (used in) provided by financing activities | (881 | ) | 666 | 2,470 | (41,305 | ) | |||||||||||
| Effect of exchange rate differences on cash and cash equivalents | (687 | ) | 655 | 80 | 524 | ||||||||||||
| Net increase (decrease) in cash and cash equivalents | 275 | 11,306 | 6,657 | (47,584 | ) | ||||||||||||
| Cash and cash equivalents at beginning of the period | 101,491 | 45,892 | 95,109 | 104,782 | |||||||||||||
| Cash and cash equivalents at end of period | $ | 101,766 | $ | 57,198 | $ | 101,766 | $ | 57,198 | |||||||||
| Supplemental disclosure of cash flow information | |||||||||||||||||
| Cash paid for income taxes | $ | 11,513 | $ | 10,399 | $ | 12,974 | $ | 10,493 | |||||||||
| Cash paid for interest | — | 12 | — | 2,023 | |||||||||||||
| Contingent purchase price accrued | — | — | — | 23,146 | |||||||||||||
Source: Liquidity Services, Inc.
Liquidity Services, Inc.
Julie Davis, 202-467-6868 ext. 2234
Senior
Director, Investor Relations
[email protected]
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